How to tax small businesses? In recent months, this question has become the centre of heated discussions in Ukraine. The main topic of the discussions is the future of the Simplified System of Taxation, Accounting and Reporting (or Simplified Tax System, STS), which may be reformed as part of the government’s tax reform.

In Ukraine, the main channel of the impact of remittances on GDP is consumption. The scope of impact depends on two factors – the marginal propensity to save and the propensity to purchase imported goods and services.